Game Group has been given a reprieve by its lenders, but the retailer may have to sell its overseas stores to secure it.

After a dismal Christmas, Europe's biggest video game retailer admitted that it was going to have issues meeting its debt commitments and paying the £80m rent on its 1,274 shops worldwide, and immediately went into talks with its lending banks to try to dig itself out.

Late on Thursday night, Game said that its debt-holders had agreed to give it a break on the terms of its loans.

"The board of Game is pleased to announce that it has now concluded discussions with its lending syndicate and agreed revised terms for its facilities," the retailer said in a canned statement.

However, the second chance comes at a price.

"Under the terms of the revised facilities, the group has agreed to operate within lower limits of its existing facilities than was previously available," the company said. "The group has also agreed to provide an updated strategic plan for review, and approval in part, by the lenders.

"This plan will cover all aspects of the business's activities and strategy, including its overseas operations."

Rumours had already been flying about that Game would consider getting rid of some of its international stores – located in France, Spain, Scandinavia, the Czech Republic and Australia – to help make ends meet. The group is already planning to close 50 of its 600 or so UK and Ireland stores before 2013.

Ian Shepherd, Game Group's CEO, said: "We're pleased to reach agreement with our lenders, but should be under no illusions about the challenges in our market or the hard work that is required to deliver our strategic plan."

The retailer said in its Christmas trading statement that it hoped to be the European market leader for the launches of the PlayStation Vita and Nintendo Wii U expected in 2012.

Thursday's statement said that the board now expect to make a loss before tax of £18m for the year to the end of January. ®